New South Wales Court of Criminal Appeal CITATION : Regina v Pearce [2001] NSWCCA 447 FILE NUMBER(S) : CCA 60053/01 HEARING DATE(S) : 30 May 2001 JUDGMENT DATE : 7 November 2001 PARTIES : Regina (Commonwealth) v Edward Spencer Pearce JUDGMENT OF : Dowd J at 1; Greg James J at 2; Smart AJ at 3 LOWER COURT JURISDICTION : District Court LOWER COURT FILE NUMBER(S) : 00/11/0609 LOWER COURT JUDICIAL ADCJ Stewart OFFICER : COUNSEL : (A) Mr J Glissan QC and Mr R Nicoll (C) Mr D J Fagan SC SOLICITORS : (A) Conway MacCallum (R) Cwealth DPP CATCHWORDS : Defrauding the Commonwealth (3 counts)- notional deduction of group tax - responsibility for not sending in employment declarations and for alterations to group number and company names - refusal of adjournment to allow further investigation - admissibility of statements made to ATO tax audit team - not obbtained improperly - ss 138 & 139 of Evidence Act - s 137 of Act - probative value not outweighed by danger of unfair prejudice - notes made by appellant as to meetings with ATO officers admissible as evidence of consciousness of guilt - no prejudice suffered by admission and later withdrawal of group tax summary as evidence to that effect given - ample evidence to support all counts - sentencing structure erroneous - appellant re-sentenced. LEGISLATION CITED : Evidence Act 1995 ss 50 137 138 139 Crimes Act 1914 (Cth) s 16G, s19AB Edwards v The Queen (1993) 178 CLR Peters v The Queen (1998) 192 CLR CASES CITED: Spies v The Queen (2000) 74 ALJR 1263 R v Bibaoui (1997) 87 A Crim R R v Jackson (1998-1999) 104 A Crim R Claude Bernier (1998) 102 A Crim R DECISION : See para 172 - IN THE COURT OF CRIMINAL APPEAL 60053/01 DOWD J GREG JAMES J SMART AJ Wednesday, 7 November 2001 THE QUEEN (COMMONWEALTH) v EDWARD SPENCER PEARCE JUDGMENT 1 DOWD J: I have had the advantage of reading the judgment of Smart AJ in draft form. I agree with the proposed orders, and with his Honour's reasons. 2 GREG JAMES J: I agree with Smart AJ. 3 SMART AJ: Edward Spencer Pearce appeals against his convictions on each of three counts of defrauding the Commonwealth in respect of the group tax liability of (1) Concrete Formwork Pty Ltd (deregistered) (previously known as Fyna Formwork Pty Ltd) for the period 1 June 1995 to 30 June 1996 (2) Build-Form Pty Ltd for the period 1 July 1996 to 30 June 1997 (3) Build-Form Pty Ltd for the period 1 July 1997 to 30 June 1998 4 Mr Pearce also seeks leave to appeal against a sentence of imprisonment for a total of 5 years 4 months with a non-parole period of 3 years 4 months. The mechanics of the sentence require attention, as it was incorrectly constructed. 5 The appellant did not contest that the Commonwealth had been defrauded in respect of large amounts of group tax purportedly deducted from the wages of many employees of these companies which formed part of the Fyna Group. It was not contested that the companies had not remitted the group tax purportedly deducted to the Australian Taxation Office (ATO), employment declarations were not sent to the ATO so it could check as to the taxation payments it should be receiving and records were kept and created which were false and misleading in a material particular and used. The issue was whether the appellant was involved in such conduct. The Commonwealth insisted that its interests were imperilled in that it lost the opportunity as a result of what happened to enforce in a timely way the statutory debt due to it arising out of the purported deduction and non-remission of the tax deducted from the wages of the employees of the companies. It was common ground that the companies did not have the moneys notionally deducted to remit to the ATO. The companies used all moneys received in the business, principally to pay the wages of employees and for materials. The business of each company was not profitable. 6 The appellant denied that he had been dishonest and disputed some of the critical evidence that linked him to the dishonest acts alleged. The appellant contended that the judge wrongly admitted evidence against him and that such evidence was capable of being highly prejudicial and that he should have been acquitted because of the insufficiency of the admissible evidence and also because the verdicts were not reasonably supported by the evidence. Some of the evidence was said to be obviously unreliable. The judge's refusal to grant an adjournment of the trial was also said to be erroneous as it denied the appellant the opportunity to make adequate investigation of material which had recently come to light and which may have led to another person being responsible for the dishonesty alleged. Background 7 The Fyna Group comprised some 25 companies. The Group's principal business was the erection of formwork for concreting as sub-contractors to builders. In each of the financial years ended 30 June 1996, 1997 and 1998 one of the companies in the Group employed 100-200 formworkers to carry out this work. From 24 January 1994 the appellant was the commercial manager of the Group and in charge of the Group Office at Belmore directing the clerical and administrative staff who worked there. 8 Employers were required to register with the ATO for group tax purposes. It assigned a group tax number unique to each employer. Upon registration employees were issued by the ATO with forms upon which to notify the Commissioner of amounts of group (or Paye) tax deducted and remitted. The forms had the group tax number printed on them. 9 It was the task of each employer to deduct tax instalments from the gross wages of each employee in accordance with the ATO tax scale and remit the tax so deducted to the ATO. The ATO stipulated how frequently the remittances of the tax deducted were to be made, for example, within 14 days of the end of each month. 10 As each employee commenced work with the employer it had to arrange for the employee to complete his part of an employment declaration. The employer was required to complete its part and forward the completed declaration to the ATO. It contained the Group number. 11 The ATO maintained a database called the ATO Integrated System (AIS). This data base contained a record of all registered group employers, their group numbers and amounts of group (or Paye) tax deducted from employees' wages and remitted. 12 If the employment declarations were not sent to the ATO then it was deprived of an opportunity of detecting employers who were not remitting Paye deductions in respect of all their employees. 13 At the end of each financial year an employer was required to issue a group certificate in respect of each employee, showing the amount of the gross wages paid to the employee and the amount of tax deducted from those wages. That should correspond with the amount remitted to the ATO. It was important that the name of the employer and its group number be correctly stated on the group certificate so that these details matched precisely the details on the AIS to enable prompt and sufficient checking. Corrupting the names and the numbers made checking much more difficult. Count 1 14 In the year ended 30 June 1995 the employer company within the Group was Fyna Formwork Pty Ltd. Its name was changed as from 23 June 1995 to Concrete Formwork Pty Ltd (Concrete Formwork). On the same day a separate new company with the name Fyna Formwork Pty Ltd was incorporated. 15 In the year ended 30 June 1996 gross wages of $3.7 million were paid to employees of Concrete Formwork from a bank account in the name of Fyna Formwork. The Group prepared weekly payroll reports. The appellant agreed that he saw these regularly. These showed the progressive cumulative totals of gross wages payable and tax instalment deductions. The total deductions from wages purportedly made by Concrete Formwork in the 1996 year which should have been remitted to the ATO was $1,007,006.24 according to the payroll reports. However, the total of the amounts shown in the group tax certificates as tax deducted was $600 - more. No moneys were remitted. 16 It was the Crown case that the appellant defrauded the Commonwealth by dishonest acts which concealed from the ATO that Concrete Formwork was employing workers, purportedly deducting income tax from their wages and not remitting the deductions. The effect of this concealment was to imperil the Commonwealth's economic interest in the recovery of the tax instalment deductions which were payable to it as a statutory debt of Concrete Formwork. The company was de-registered on 11 November 1998. 17 The Crown alleged that the appellant adopted dishonest means to perpetuate the fraud. It relied on the evidence of Susan Bawalan, the Group's paymistress from prior to June 1995 until February 1996, that until shortly after 22 June 1995 it was part of her duties to fill out the employer's part of the employment declarations and send the originals to the ATO. However, at that time the appellant instructed her to cease sending employment declarations for new employees to the ATO. The appellant did not countermand this instruction to Ms Bawalan while she continued as paymistress. Nor did he instruct Ms Tina Harvey to resume sending in the declarations when she became paymistress in February 1996. 18 There was evidence that shortly after the end of the 1996 financial year the appellant instructed Ms Harvey to issue all group certificates to the employees showing the name of the employer as Formwork Concrete. The correct name was Concrete Formwork. He also instructed her to insert the group employer registration number as 1912-8625. The correct number was 1912-6852. 19 The ATO operated a data base known as the Declaration Management System (DMS). It held all the data taken from the employment declarations and incorporated the names and group numbers of all registered employers taken from the AIS. Every two months the DMS personnel of the ATO "swept" the data base to match employer names and group numbers as nominated upon employment declarations against AIS records of group tax remittances received from group employers. This detected any employers who were, according to the receipts of employment declarations, employing personnel but not remitting Paye deductions. Thus, if employment declarations were not sent, the ATO would not become aware that Concrete Formwork was employing formworkers but not remitting tax instalment deductions. 20 On occasions, but not automatically, the ATO would attempt to match the group certificates lodged with individual employees' income tax returns against the AIS record of group tax remittances by employers nominated in the group certificates. If such a match were made and it appeared that there had been a non-remittance of group tax, the ATO officer was bound to inquire into the discrepancy. 21 A false employer name and/or number on the group certificate precluded any attempted match. This could lead to the officer handling the individual return assuming system error or some other anomaly and thus not picking up that the employer had not remitted all the tax deducted from the employee's wages. Count 2 22 In the 1997 financial year the formworkers were employed by Build-Form Pty Ltd (Build-Form) with gross wages of $9 million being payable to them. Their net wages were paid from a bank account in the name of Fyna Formwork. The Build-Form payroll reports showed that total Paye tax instalment deductions of $2,567,640.58 were made. None of this sum was remitted to the ATO. 23 The Crown alleged that in respect of the 1997 financial year the appellant defrauded the Commonwealth by dishonest acts and omissions which concealed from the ATO that Build-Form was employing workers, was deducting income tax from their employees' wages and was not remitting the deductions. The appellant gave no instructions to the paymistress for the 1997 year (Ms Harvey) to negate or reverse the practice of not sending in employment declarations. Ms Bawalan and Ms Harvey stated they showed the appellant a payroll summary report each week. From this, he knew that numerous additional employees had been taken on. Group tax deductions grew from about $80,000 per month in the 1996 year to about $250,000 per month in the 1997 year. 24 There was evidence that the appellant knew by June 1995 of the ATO's pursuit of thousands of dollars of group tax owed by the Group for the 1994 year and that more than this was accumulating every month in the 1997 year. However, the ATO did not demand payment. The Crown submitted that the appellant must have realised that his ploys had resulted in the ATO not being aware of what was happening and of Build-Form's default in remitting tax instalments. 25 The Crown relied on the notes made by the appellant as to a conference held on 15 September 1998 attended by him, other representatives of the Group and officers of the ATO. They included these passages. "The matter of Concrete Formwork/Fyna Formwork for the 1996 period was raised. I did not think it prudent to make the exact connection for them. To this extent, they probably thought that we were quite stupid in not being able to have an answer. However, it was our intention to lay a trail that they could use to come to the realisation that Concrete Formwork was, in fact, using the old Fyna Formwork Group Number and through changes in payroll personnel, some form of error had transpired." and "Again, the question of a Group Tax Number for Fyna Formwork/Concrete Formwork was raised … I believe that they (ATO officers) may be alluding to some form of Group Tax evasion. Hopefully with sufficient information on the table, they will be able to make the nexus between Fyna Formwork and Concrete Formwork and the name changes associated with that. At this point in time I do not intend to 'hand it to them'." and "They asked the question regarding employee declarations. The bulk of the declarations that we have were not completed and sent to the ATO. The question was asked - why? I responded by saying I don't know why. Implicit in that - why would we send it in if we weren't paying group taxes - it's just shooting ourselves in the foot, but I didn't tell them that." 26 The Crown submits that what emerges from the notes as a whole is that the appellant was a shrewd operator fully aware of the facts and what had been happening. They illuminated the appellant's dishonest intentions and negatived any accidental breach. He was going to supply as little information as possible and leave it to the ATO to try and work out what had happened and the reasons why various acts or omissions occurred. The appellant challenges the admissibility of the notes and the judge's decision to admit them. 27 At the end of the 1997 year the appellant according to Ms Harvey instructed her to complete group certificates for that year showing "Bilt Form" as the employer (instead of "Build-Form") and the group employer number as 295-205-74 instead of 205-295-74. 28 The Crown contended that the appellant's dishonest acts (that is, including the failure to send in employment declarations, deducting and not remitting the Paye tax, the corruption of the employer name and group number) imperilled the Commonwealth interest in recovering the tax instalment deductions from Build-Form in the same way as alleged in count 1. The Crown relied on the DMS and the opportunities the ATO lost to check in a timely manner what was happening and on the tax not being remitted and to pursue its recovery. The tax instalment deductions are payable as a statutory debt. Build-Form went into administration during the ATO's audit in February 1999 and a liquidator was appointed on 26 February 1999. Count 3 29 In the 1998 financial year the formworkers continued to be employed by Build-Form. Gross wages of $10.3 million were payable to employees. The employees were paid net wages from a bank account in the name of Forma Formwork. The payroll reports indicate total Paye tax instalment deductions of $3,134,885.93. None was remitted to the ATO. 30 The Crown alleged that the appellant defrauded the Commonwealth by dishonest acts of the same kind as those set out under Count 2. The Crown relied on the appellant not instructing Ms Harvey to reverse or negate the system of not forwarding the employment declarations to the ATO for the first eight months of the 1998 year while she was still the paymistress. No employment declarations were sent to the ATO. The Crown submitted that from his weekly review of the payroll reports the appellant knew that group tax deductions were running at about $200,000 to $300,000 per month. Again, he knew that the ATO was not demanding these moneys and could not have been aware of the numerous new employees. The inference was open that he knew that the employment declarations were not being sent to the ATO. The Crown contended that the notes made by the appellant as to the conference on 16 September 1998 with the ATO officers mentioned earlier reinforce that the appellant knew and approved of the employment declarations not being sent to the ATO. He did not want the Group "shooting itself in the foot". 31 No employment declarations were sent to the ATO from February 1998 to 30 June 1998 during which time Ms Jennifer De Wet was the paymistress. The group certificates for the financial year 1998 were issued with the same erroneous name and the same erroneous group number as in the year 1997. Ms De Wet was instructed to fill out the group certificates in this manner by Karen Lee, her superior and whom Ms De Wet understood to be in charge of accounts. There was no evidence that the appellant had instructed Ms K Lee to that effect,. However, Ms De Wet gave to the appellant the employer's copy of the group certificates and the originals to be sent to the ATO. Some time later she asked him for and received back the employer's copy of the group certificates. She needed them for her work. 32 The form of the group certificates produced to the ATO on 16 September 1998 showed that the appellant had taken no step to recall or replace the erroneous group certificates. The Crown contended that his inactivity amounted to adoption of a misrepresentation on the group certificates in circumstances which made his conduct in that respect dishonest. 33 There was evidence that the appellant had a superintending and supervising role over the accounts, the office staff and the office system. That evidence came from members of the office staff of the company and from the details of the staff structure of the companies. The staff reported to him and took directions from him. He administered the office as the Group's commercial manager. 34 The Crown relied on a variety of circumstances. Some have already been mentioned. Others were: (a) The appellant set out to damn Ms Harvey and discredit her. However, she had worked for the company for a number of years and received salary increases. He engaged in retrospective character assassination. This was to encourage the jury not to accept her damaging evidence. (b) The appellant admitted that he knew that the numbers of the workforce were increasing and also the amounts of Paye tax. He claimed that he did not realise that the employment declarations were not being sent to the ATO. He said that it was not part of his job. He said that he was uncomfortable about what was happening but he thought that the ATO would come. The Crown contended that it was simply not believable that he thought that the ATO would come when he had taken action to evade, avoid and postpone the remission of Paye tax. (c) The appellant did his own tax returns, using Group Certificates containing the corrupted name of the relevant company and the corrupted group number. Accordingly, he must have been aware that the wrong name and number had been used. (d) On 1 July 1998 in his telephone conversation with Mrs Haynes of the ATO, the appellant was alerted to the ATO's interest in the Fyna Group, its operations, its employees and its compliance with its Paye obligations. The group certificates for the year ended 30 June 1998 issued on 3 July 1998 showed the corrupt name of the employer and the corrupt number. As earlier mentioned the originals and the employer's copies were, according to Ms de Wet, given to the appellant. The Crown contends that he must have known what was happening. 35 The Crown conceded as to the year ended 30 June 1998 that there was no direct evidence that the appellant directed that the corrupted name of "Bilt Form" and the corrupted number be used. The Crown relied, inter alia, on the appellant's prior directions as to their use in earlier years, his receipt of the original group certificates, his use of his own group certificates to prepare his own tax returns and his false statements to the ATO officers. The Crown contended that the circumstances pointed to but one conclusion, namely, that the appellant knew of and authorised the use of the corrupt name of "Bilt Form" and the corrupt group number. 36 The Crown relied on what it described as deliberate lies by the appellant and conduct evidencing a consciousness of guilt. These included: (a) The appellant telling Mrs Haynes of the ATO that he did not know a company called Bilt Form (Count 3) (b) The appellant telling Mr Curlie of the ATO that he (the appellant) only worked part time and that he had no other personnel to provide information (Count 3) (c) The appellant withholding information which amounted to lies - see the paragraphs earlier quoted from the notes of the appellant as to the meeting with the ATO representatives on 16 September 1998 (Count 1). (d) The mis-information, mis-naming and mis-numbering on the "Formwork Concrete" group certificates of 1996 (e) The withholding by the appellant of the group certificates for 1996 sought by the ATO on 16 September 1998 and located by Ms Harvey shortly thereafter. They were not provided by the appellant to the ATO until 6 November 1998. (Count 2) (f) The appellant telling Mrs Haynes on 1 July 1998 that most of the work done at the instance of the Group was hire work and there were only a few employees (all Counts). There were many employees. (g) The appellant telling Mrs Haynes on 13 July 1998 that to the best of his knowledge the Fyna Group was not doing work for Mirvac and not working on the Olympic site. The Fyna Group did a significant amount of work for Mirvac involving millions of dollars. The Group also worked on the Olympic site (all counts) The Defence Case 37 The appellant gave detailed evidence in chief and was cross-examined at some length. He denied that he had been dishonest in any way. He asserted that anything he said to the ATO officers was not with the intention of misleading them. He may have been less than frank and he did tell lies. He panicked because they were down on him and he could see it looming that he was going to be "in the frame". 38 The appellant said that he was the Group's commercial manager and never assumed the position of group financial controller. He was away from the Group's office quite often. He was away interstate two to three days per ten day fortnight. He was also out of the office a lot dealing with industrial relations matters with unions. This varied from almost all day for nearly every day to about one day per week. He spent much of his time in negotiations. There were also contract negotiations with contractors. He said that he probably averaged two to three days per week in the Group's office. The appellant said that while he reviewed the accounting procedures he did not engage in any of the detailed accountancy work such as maintaining the records, doing the bookkeeping or making the entries in the books of account. He detailed what people should do and how they should do it. 39 The appellant said that he gave directions to Ms Susan Bawalan in June 1995 not to send the employment declarations to the ATO because Fyna Formwork was changing its name to Concrete Formwork. He never spoke to her again or to anyone else in the office about them. It was not his intention in giving that direction that employment declarations should never again be sent to the ATO. As from 1 July 1995 the employment declaration would have to be filled out in the name of Concrete Formwork. The appellant said that the prime responsibility for filling out the employer's part of the employment declarations and sending it to the ATO lay with the paymaster/paymistress. Either the senior accounts clerk, Ms Karen Lee or the financial controller (somebody else) was responsible for ensuring that the paymistress completed the employment declarations and sent them to the ATO. He assumed that once the change of name took effect on 1 July 1995 the previous procedures would continue as before with the completed employment declarations being sent to the ATO. He did not realise that they were not being sent. The employment declarations completed by employees were kept in the pay office. He had nothing to do with the files in the pay office. He first saw the employment declarations after Mrs Haynes of the ATO asked for them and he obtained them from the pay office. 40 The appellant denied that he ever gave Ms Harvey a direction to use the name Formwork Concrete on the group certificates for the year ended 30 June 1996. He also denied that he gave her a number to be inserted as the group number. The appellant insisted that the conversation alleged by her did not take place. The appellant further denied that for the year ended 30 June 1997 he told her to show the name "Bilt Form" on the group certificate as the employer and that he gave her the number to be inserted as the group employer number. He denied that he wrote down that name and a number for her. The appellant said that he had no conversation to the effect alleged by Ms Harvey and that he did not give her any direction as to the filling in and completion of the group certificates. He denied that he had any conversation about bar codes appearing on group certificates. 41 The appellant relied on Ms Harvey, when she made her first statement to the police saying that she had no specific recollection of the creation of the 1996 group certificates. Ms Harvey agreed that that was not totally true and that she was apprehensive about police action being taken against her. Because of that apprehension she did not say everything that she knew and recalled. Shortly after her initial statement to the police she provided another statement that included the information as to the creation of the 1996 group certificates. The appellant contended that Ms Harvey had lied on her oath when she said that the appellant instructed her to insert a corrupt name (Formwork Concrete) and a corrupt group number in the 1996 group certificate. Considerable reliance was placed on the lie in her initial police statement. It was put that she was a liar on her own admission and that her evidence should not be accepted. At the very least the jury should have a reasonable doubt about it. Both Ms Bawalan and Ms Harvey had been granted indemnities from prosecution by the Crown. In his evidence the appellant elaborated on the faults of Ms Harvey and the mistakes she made in making up the payroll. He said that he had to speak to her on a number of occasions. The effect of his evidence was that she was incompetent. He described his relationship with her as cool at best. It was left open to the jury to conclude that she was incompetent and unreliable and had a grudge against him. The Appellant's Cross-Examination 42 This was of considerable importance. It covered the circumstances surrounding each offence and the appellant's explanations of facts and circumstances that were incriminating. It also dealt with the appellant's attempts to discredit Ms Harvey and his disclaimers of responsibility. The appellant said that when he applied for his position in January 1994 he was familiar with the operation of the group tax system in an "overview" capacity. He knew that each employer was required by the Income Tax Assessment Act to be registered, to make tax instalment deductions and to remit these sums monthly to the ATO. He knew that the sums so deducted became a statutory debt and needed to be taken into account in any cash flow calculations. Soon after taking up his position he became aware that at any one time there was an employer company in the Group which had a substantial payroll primarily of people working on construction sites with formwork. The business was labour intensive and the majority of its expenses were labour expenses. 43 The appellant agreed that he was aware that the employer was required annually to issue group certificates and to send copies to the ATO together with a reconciliation of the total Paye deductions and the amounts remitted. The appellant also agreed that he was aware that the employer had to have every employee complete an employment declaration and that the employer had to complete his portion and send the completed declarations to the ATO. He was aware that the employer's portion had to contain its name and group registration number. He appreciated that the purpose of the employment declaration was to enable the ATO to match up employees with the companies as to the instalment deductions. He agreed that he was ultimately in charge of all employees and that they were subject to his direction and authority. 44 The appellant agreed that he regularly saw the payroll reports in summary form. He signed the cheque for the employees' wages. He checked that the total of the cheque, based on the number of employees, was within the order that he expected. Each time he saw the payroll reports in summary form he noted the amount of the tax instalment deductions. That amount was supposed to be remitted within a short time thereafter. 45 In his evidence in chief the appellant referred to the outstanding tax liabilities of Fyna Formwork for the years ended 30 June 1993 and 1994, to his meetings with the ATO in 1994 and 1995 about arrangements for payment and to extensive correspondence including into late 1995. The appellant agreed that at no stage did he inform the ATO that the group tax for the year ended 30 June 1995 exceeded $600,000. He said that it was not his responsibility to do so. In an agenda he had prepared (which included requests from others for various items to be added) for a meeting on 18 May 1995 with the group's managing director and Mr M Meyer it was noted "current year 94 to 95 indebtedness of Fyna Formwork is $644,711" and "exposure of Fyna Formwork to proceedings of the ATO will jeopardise the operational performance of Fyna Formwork". One of the options noted was "create another operational entity and let Fyna Formwork go". It was at that meeting that Mr J Soong, the managing director decided to change the name of Fyna Formwork to Concrete Formwork as from 1 July 1995. The actual change took effect from 23 June 1995. The appellant said that he just carried out the instructions he had received. He did not know what purpose the directors had in mind. He was not aware that the group registration number of Concrete Formwork (previously Fyna Formwork) was cancelled as from 6 July 1995. The appellant said that the Group financial controller, not him, was responsible for matters such as cancelling group registration and incorporating companies. 46 The appellant was unable to explain why he did not tell Ms Bawalan to send the employment declarations to the ATO with the new name of the company. The appellant insisted that it was his intention that Ms Bawalan suspend sending the employment declarations to the ATO, not cease doing so. He assumed she would resume sending them to the ATO automatically once the new name was in use. It did not ever occur to him to tell her to resume sending the employment declarations to the ATO. He had to deal with many other pressing matters. 47 The appellant agreed that for July, August and September 1995 he appreciated that group tax was running at over $80,000 per month and that no money was being remitted to the ATO. The amount of group tax continued to build up for the remainder of the year ended 30 June 1996 and reached $1 million. No money was remitted. The appellant did not turn his mind to whether the ATO was advised by the Group of the position or knew. The ATO officers never commented or asked about what was happening in the 1995/1996 year with the Group and he never told them. That was a matter for the financial controller. 48 The appellant sought to explain what were apparently damaging comments in his notes on the meeting of 16 September 1998, eg, "why would we send employment declarations in if we weren't paying group taxes - its just shooting ourselves in the foot", as embodiments of the adverse implications the ATO officers were making rather than his own view. He was capturing the undercurrent of what they were saying namely, that it was deliberate. It was not. The style of interview was like an interrogation. 49 The appellant's explanation to the ATO officers on 16 September 1998 that the wrong company name appeared on the 1996 group certificates because "There were confusions at the time with several companies changing names" was challenged. He agreed that the company name changes had occurred at the end of June 1995. He did not know that there was confusion with company names in 1996. He had assumed that this is what had happened and that there had been human error. 50 The appellant thought that for the year ended 30 June 1996 there was no major creditor other than the ATO. 51 The appellant stated when he received his group certificate for the year ended 30 June 1996 he did not notice that the name of his employer was shown wrongly. When it was later pointed out to him (and he agreed) that he would have to write his employer's name on his tax return he thought that he would probably have written down what was on his group certificate. He could not recall what he wrote. Nor could he recall whether he picked up that the wrong name was on the group certificate. These answers applied to the years ended 30 June 1996, 1997 and 1998. He did not know at that time that the group number was wrong. He did not even know the group number. 52 The appellant denied that he deliberately withheld the 1996 group certificates held by his employer at the meeting of 16 September 1998. He said that they were given to him at the conclusion of that meeting or perhaps on the following day by Ms De Wet.. He did not send them on to the ATO. He overlooked giving them to the ATO at the meeting with their officers on 13 October 1998. He produced those group certificates on 6 November 1998. He said that he did not deliberately withhold them. 53 The appellant stated that he was aware that after the end of the 1996 financial year the ATO made no demand upon the Group for payment of unpaid group tax of $1 million. He knew that once the reconciliation required after the close of the year was sent to the ATO the Group would be facing immediate enforcement of a debt of $1 million and that the company involved would be facing winding-up. 54 The appellant agreed that he knew the importance of the employment declarations with the information they contained. He believed that if the group certificates issued to employees had the correct name of the employer and the correct group number and were sent in with the employees' returns this would result in the ATO identifying the company that was their employer and the ATO realising that a large amount of group tax had not been paid. 55 When the appellant was referred to his statement to Mr Curlie about 17 September 1997 that he (the appellant) worked part time, three days per week, the appellant explained that what he had meant was that he worked part time in the office. The appellant agreed that his note did not refer to the qualification "in the office", but pointed out that these were notes to him and he knew what they meant. He did not work full time in the office. He insisted that he had not told anyone any lies. As to his statement that no-one else in the office could help with the ATO enquiries the appellant agreed that maybe the financial controller could have answered the ATO questions. This is a odd bearing in mind the appellant's earlier statements as to his lack of knowledge and the financial controller's knowledge and responsibilities. 56 The appellant agreed that he had recorded that he had said that the office staff was ESP plus one front office girl. This was not true. He could not remember the context. The appellant agreed that Mr Curlie gave him a list of companies that he was chasing for group tax. The list did not include Build-Form. He knew that Build-Form had purported to deduct $2.5 million for tax and had not remitted any of it. The appellant agreed that he was aware that Build-Form had purported to deduct another $750,000 up to that point for the year ended 30 June 1998 and had not remitted any of it. The appellant agreed that it was obvious to him that if Mr Curlie did not ask him about a total indebtedness of $3.2 million in relation to Build-Form then he did not know about it. The appellant added that Mr Curlie did not want to know about it. His enquiries were linked to the companies that he listed. The appellant said that he did not tell Mr Curlie about the $3.2 million owed by Build-Form for tax deducted and not remitted because the company did not have the money. He spoke to the directors and they showed him feasibility assessments of projects where the Group could obtain the money. He was scared of the level of debt. He did not approve of that and assumed that the ATO would eventually come to the Group. The appellant acknowledged that Mr Curlie was enquiring about Paye tax with respect to the companies in the group and that the appellant knew that the employer was Build-Form and did not tell him. 56 The appellant agreed that he had recorded that he had said that the office staff was ESP plus one front office girl. This was not true. He could not remember the context. The appellant agreed that Mr Curlie gave him a list of companies that he was chasing for group tax. The list did not include Build-Form. He knew that Build-Form had purported to deduct $2.5 million for tax and had not remitted any of it. The appellant agreed that he was aware that Build-Form had purported to deduct another $750,000 up to that point for the year ended 30 June 1998 and had not remitted any of it. The appellant agreed that it was obvious to him that if Mr Curlie did not ask him about a total indebtedness of $3.2 million in relation to Build-Form then he did not know about it. The appellant added that Mr Curlie did not want to know about it. His enquiries were linked to the companies that he listed. The appellant said that he did not tell Mr Curlie about the $3.2 million owed by Build-Form for tax educted and not remitted because the company did not have the money. He spoke to the directors and they showed him feasibility assessments of projects where the Group could obtain the money. He was scared of the level of debt. He did not approve of that and assumed that the ATO would eventually come to the Group. The appellant acknowledged that Mr Curlie was enquiring about Paye tax with respect to the companies in the group and that the appellant knew that the employer was Build-Form and did not tell him. 57 The appellant denied that he selected the name "Bilt Form". 58 The appellant agreed that in July 1998 he told Mrs Haynes that the only operating company was Fyna Construction Hiring and Sales Pty Ltd, that it hired out equipment and that was the only source of income of the Group. He agreed those statements were untrue. The appellant could not recall the questions he was asked nor the context. 59 The appellant, after some pressing, agreed that Mrs Haynes was asking an open question, what does the group do? He agreed that his answer that most of the work done was hire work and there are only a few employees was untrue. He claimed that he panicked. The appellant said that he made a couple of telephone calls to the directors but he was put off. The directors told him that there was a project (or projects) coming up and that there would be plenty of money. The appellant stated that all he had was enough money to meet the nett wages. 60 It was acknowledged by the appellant that when Mrs Haynes spoke to him the Group owed about $6.5 million by way of Group tax. 61 The appellant said that when he replied to Mrs Haynes' question that the Group was not doing work at the Olympic site this was not a lie. The Group had no work on the Olympic site. It was working at the new suburb of Newington. That overlooks the Olympic site. He did not tell Mrs Haynes about the Group's work at Newington. He said that the Group's workmen called it the Olympic site and that he had used that term. 62 The appellant said that in giving his answers he was concerned about the substantial number of men the Group had working for it. He agreed that it looked as if he was prepared to lie to the tax officers to put them off finding about the state of indebtedness of the Group to preserve the workforce. 63 Although he told Mrs Haynes on 13 July 1998 that the Group was to the best of his knowledge not contracting with Mirvac, the appellant agreed that prior to that date he was aware that the Group had done $14 million worth of work for Mirvac over about 3 or 4 years.. He agreed that he had told Mrs Haynes a significant lie but he denied that it was a deliberate lie. He pointed out that he did not control the company, that what was happening did not fit well with him and that he said the first thing that came to his mind. 64 The appellant agreed that he was aware that in July 1996 Concrete Formwork entered into a deed of arrangement and that an administrator was appointed. He said that the Group's directors decided to make Build-Form the employer as from July 1996. He was told at some point, that is, early in the financial year. 65 The appellant conceded that in the 1995/1996 year, the 1996/1997 year and the 1997/1998 year there was a large turnover of men in the Group's workforce. In the 1995/1996 and 1996/1997 years the workforce grew during each year. The appellant agreed that large amounts were apparently being deducted by way of taxation instalments in the first half of the 1996/1997 year and not being remitted. Build-Form had no money to pay the tax instalments notionally deducted. The appellant expected the ATO to call any time. It did not occur to him that the ATO was not receiving the usual statutory information from Build-Form. 66 The appellant agreed that the financial controller, Mr Jankovic, left months before the tax audit commenced in about July 1998. He was not replaced. The appellant provided any "input" required for the automated payment system, but not much was required. He said that Ms Karen Lee assumed the bulk of the duties of Mr Jankovic. 67 The appellant insisted that Ms De Wet did not hand him a full set of the ATO and employer's copies of the group certificates for the 1997/1998 year. He stated that she gave him a computer generated reconciliation list in early July 1998. He agreed that the group certificates had to be "run" before the list could be obtained. He said that it was not his responsibility to see that the group certificates were sent to the ATO. He did nothing about them. He did not know that they had not been sent to the ATO. 68 The appellant said that the reason why he denied having heard of a company called "Bilt Form" and did not tell Ms De Wet that the correct name was Build-Form was that he wanted to talk to the directors first. The appellant felt some allegiance to Mr Soong, who had put in his own money to get the business going. 69 The appellant said that his case was that he never initiated anything of a dishonest nature with intent to defraud the ATO. He was plunged into a situation which was not of his own making by the directors and from very early in his employment had to deal with the ATO about non-payment of tax for past years. 70 Based on the answers given by the appellant in cross-examination and the notes which he made of his meetings with the ATO officers and his comments, the jury would have been amply entitled to take the view, despite his assertion to the contrary, that he had an intent to defraud the Commonwealth and had helped to do so. It was unbelievable that he did not know that the employment declarations were not being sent to the ATO, that the group certificates for the years ended 30 June 1996, 1997 and 1998 produced and given to the employees contained a corrupted company name and a corrupt group number. 71 I propose to deal with Appeal Ground 2 first. Appeal Ground 2 reads: "The trial judge erred in refusing to the appellant an adjournment of the trial after the miscarriage of the first trial" . 72 The first trial miscarried when one of the jurors advised the Court that she had been involved in helping to find employees for the Fyna Group. The jury was discharged on the morning it was empanelled. A few days later a second jury was empanelled. 73 Before the first jury was empanelled Ms Karen Lee, the senior accounts clerk at the Group, was examined on the voir dire. She had declined to be interviewed or to give a statement. She had foreshadowed that she would object to answering questions on the ground that the answers may tend to incriminate her. Ms Lee was the person whom Ms De Wet said had instructed her to insert the corrupted company name and the corrupted group number in the group certificates for the year ended 30 June 1998. The Crown had hoped that Ms Lee would say that the appellant instructed her to have the corrupt name and the corrupt group number inserted on the group certificates for the 1998 year or otherwise link the appellant to what had occurred. 74 After Ms Lee was examined on the voir dire the Crown announced that it would not be calling her at the trial. The following day, after the trial judge had given an important evidence ruling and prior to the first jury being empanelled the appellant applied for the issue of subpoenas, returnable on abridged notice, in connection with two e-mails received by the appellant in the first week of October 2000. They had been pursued but the appellant had run into a brick wall. Eventually on 30 October 2000 the proper officer of Bankstown Scads Computer said that the e-mail (or e-mails) had come from a machine belonging to Karen Lee. On the following day (31 October 2000) the appellant sought an adjournment of the trial. This was based on the contents of the e-mails the effect of which was summarised by the appellant's counsel thus: "They suggest a number of things in relation to the accused: 'This is the price you now have to pay for intimidating all the people you have worked with all your life. It's payback time'. They suggest that the accused's partner has been let off by dropping the charges against him. That can only be a reference to one person, and letting you be the fall guy". 75 The appellant's counsel indicated that person was Mr J Soong, a director of the company. Counsel continued: "They then make a series of allegations about this accused's moral conduct in relation to other women which suggests there is additional evidence that is available to the tax office which the accused isn't aware (sic) and a second e-mail, 'Not even your sweet little lady friend will be available to save your arse'." 76 The appellant's counsel submitted, in effect, that Ms Lee was a worthless witness who was not prepared to tell the truth or assist the Court. Neither party would wish to call her. Counsel told the judge that it was not really open to the appellant, on the materials available at that stage, to submit that Ms Lee rather than the appellant was the architect of the scheme. 77 Counsel pointed out that Ms De Wet said it was Ms Lee who gave her the critical instructions. Counsel also submitted that the material relating to Ms Lee's credit and the e-mails bore upon whether the accused was guilty and the overall impact of the Crown case. On the materials available it could not be put by the accused to the jury that Ms Lee was responsible for what had happened. Counsel submitted that the accused was placed at a severe disadvantage which could well be cured by allowing those advising him to investigate matters further and inviting the Crown to do likewise. 78 Counsel also contended: "And this is something that really arises for the first time when the author of the emails is identified, that somebody else may well be able to be established, by other evidence, to have benefited from the commission of the offence or benefited at the time by the commission of the offences, that not being an allegation that is being made against the accused in the context of this case". 79 Counsel pointed out that the committal had occurred about three to four months previously, Ms De Wet was unlikely to recover enough to give evidence and the witnesses were local. They were not likely to be seriously disadvantaged by being asked to come on a later occasion. The appellant argued that he should have the maximum opportunity to investigate matters and establish that he was not guilty. 80 The Crown opposed the adjournment on the basis that it would be a futility. The Crown submitted that the appellant's submissions were, in effect, that he wanted to see if he could build up a case that Karen Lee was the perpetrator of the fraudulent acts with which he was charged. However, from the time the police brief was served, the Crown case was that there were distinct acts by the appellant attributed to him by Ms Bawalan and Ms Harvey and the placing of the group certificates in his hands including by Ms De Wet. The Crown contended that the corruptions were obvious and could not have been missed. 81 The Crown contended that nothing new had happened, the Crown case had not changed and the appellant was required to meet the same charges with the same particulars. The Crown contended that Ms Lee could not have been the perpetrator of the specific acts upon which the Crown relied. It was the Crown case that the appellant gave the instructions and received the group certificates. It had been apparent from the proposed evidence served by the Crown long ago that it was possible that Ms K Lee was somehow involved in the defrauding. The judge then stopped the Crown prosecutor. 82 The judge stated that he agreed that any adjournment would be an exercise in futility, and that the appellant would not be disadvantaged by any of the matters which he raised. The judge noted that there were areas where it was expected that the witnesses called for the Crown would give evidence which would be disputed by the appellant. The judge made particular reference to the direct acts to be attributed by the witnesses to the appellant. 83 The appellant criticised the judge's brief reasons (1½ pages) as they revealed a failure to consider the appellant's arguments in favour of the adjournment and a failure by the judge to exercise his discretion adequately or at all. The appellant submitted that he was impeded in the preparation and conduct of his defence by the refusal to adjourn in the light of the information revealed between the first and second trials. That included the identification of Ms Lee as the probable author of an e-mail, threatening in nature and suggestive of an awareness of details of the offence which may, after proper investigation have led a jury to remain unsatisfied of the appellant's guilt. That fact coupled with Ms Lee's performance in the witness box on the voir dire and her close association with the circumstances of the offence were capable of giving rise to both grave suspicion about her and of raising an hypothesis inconsistent with the appellant's guilt. It was submitted that a body of evidence to this effect could not be said to be unlikely to impact on the jury's assessment of the balance of the Crown case. That case was strongly challenged by the defence and denied by the appellant on oath. The appellant argued that if a body of evidence such as that proposed had been led it may well have led to a different verdict. 84 Counsel pointed out that in his summing-up the judge directed the jury to concentrate on the charges and the evidence against the appellant. It was not a question of whether Mr Soong or anyone else had done the wrong thing and should have been charged. Counsel complained the judge had denied the appellant the opportunity to explore, after the e-mail had been sent, whether there was some malice towards him which might have infected some of the evidence in the Crown case, its source and whether there was somebody else who was a candidate for being the person involved. The appellant submitted that Ms Lee was a person ideally placed to be involved in the perpetration of the fraud absent the participation of the appellant. Put colloquially counsel wanted to investigate whether she had "fitted" the appellant. 85 Neither the judge nor this Court was told exactly what course of investigation was proposed. Ms Lee would not make a statement. She was not going to risk incriminating herself. Ms Bawalan and Ms Harvey were able to be cross-examined; Ms De Wet was ill. It was not suggested that Ms Lee had persuaded any of the three ladies under her to make false statements implicating the appellant. Nor was it suggested that there was any person who heard Ms Lee persuading the other ladies or remarking that she had done so or intended to do so. It was hard to see that there was any useful line of investigation available other than to cross-examine Ms Harvey effectively and perhaps Ms Bawalan. Mr J Soong was unlikely to want to incriminate himself. The e-mails suggest rather strongly that Ms Lee did not like the appellant and there is the reference to "payback time". However that falls a long way short of establishing or raising a reasonable doubt that she prevailed upon Ms Bawalan and Ms Harvey to give untrue evidence or colour their evidence. The position as to Mr Jankovic does not appear. 86 There was ample material available to support the view that any adjournment would be futile. It was not apparent that there was any useful line of investigation which could be pursued, other than the cross-examination of the witnesses who had been granted indemnities. The appellant had already had sufficient opportunity to consider mounting a case that Mr Soong or Ms Lee was responsible for the directions and the defrauding. I am not persuaded that the judge erroneously exercised his discretion or failed to exercise it either adequately or at all. The application for an adjournment was based on nothing more than the flimsiest hope that something may turn up which would help the appellant. 87 Two further points should be made. Firstly, no attempt was made at the hearing of the appeal to lead evidence showing that an investigation had a chance of turning up useful material to help the appellant. Secondly, the evidence did establish that the appellant was in charge of the office and supervised the staff, as necessary. He was also the person who had the majority of dealings with the ATO officers about group tax. He was the person who told them lies. He was aware of the mounting unpaid group tax. 88 I would reject this ground of appeal. Appeal Ground 1 reads (a) The trial judge erred in permitting the respondent Crown to adduce evidence of conversations between appellant and officers of the ATO over objection, which conversations occurred in circumstances which deprived them of admissibility. (b) In the alternative, the trial judge erred in failing to exercise his discretion to exclude the conversations pursuant to Evidence Act 1995 (NSW). 89 The appellant contended that the evidence was obtained improperly within the meaning of s.138(1)(a) of the Evidence Act 1995 which provides: (1) Evidence that was obtained: (a) improperly … is not to be admitted unless the desirability of admitting the evidence outweighs the undesirability of admitting evidence that has been obtained in the way in which the evidence was obtained". 90 Section 139(2) of the Act provides: "(2) For the purposes of section 138(1)(a), evidence of a statement made or an act done by a person during official questioning is taken to have been obtained improperly if: (a) the questioning was conducted by an investigating official who did not have the power to arrest the person; and (b) the statement was made, or the act was done, after the investigating official formed a belief that there was sufficient evidence to establish that the person committed an offence; and (c) the investigating official did not, before the document was made or the act was done, caution the person that the person does not have to say or do anything but that anything the person does say or do may be used in evidence." 91 The question which arose was whether the appellant made his statement after an investigating official formed a belief that there was sufficient evidence to establish that the appellant had committed an offence. No caution was administered. It seems that the ATO officials were investigating officials. The judge assumed that. Under the dictionary to the Evidence Act, Part 1, Definitions "investigating official" relevantly means: "(b) a person appointed by or under an Australian law … whose functions include functions in respect of the prevention or investigation of offences". It was common ground that the ATO officials did not have the power of arrest. 92 The judge held that at the time of the conversations no investigating official had formed the belief that there was sufficient evidence to establish that the appellant had committed an offence. 93 In support of his submission that an ATO official had formed such a belief the appellant relied on a chronology: That was a useful starting point but I have enlarged the more important entries and omitted some which were minor. The amended chronology follows: June 1998 - Mr G Darmanin. a senior ATO officer, asked Mrs D M Haynes, a subordinate ATO officer who investigated and audited companies in the Small Business line of the ATO for non-compliance with withholding tax legislation, to investigate the Fyna Group for possible non-compliance with withholding tax legislation. She began by searching ATO and ASIC records. 29 June 1998 - Mrs Hayes telephoned Mr J F Wells, the Group's taxation accountant and consultant and was given certain group registration numbers. 1 July 1998 - Mrs Haynes telephoned Fyna Group and spoke to the appellant. She said that they had some concerns about Paye. The appellant said that most of the work was hire work and there were only a few employees. An appointment was made to meet on 13 July 1998. 13 July 1998 - Appellant attends at ATO for meeting withMrs Haynes and Mr K Fordham, an ATO officer. Appellant produces a list of companies in the Group and advises as to the trading (or non-trading) position of each. Appellant advises Fyna Group is not working on the Olympic site and does not subcontract to Mirvac Denies having heard of a company called Bilt Form Pty Ltd. Indicates by implication that he has heard of a company called Concrete Formwork. Said that Fyna Constructions (Vic) paid his wages and Paye deductions. 20 July 1998 - Meeting of the ATO officers (Haynes, Fordham and Wood) with Mirvac. 28 July 1998 - Meeting of Mrs Haynes and Mirvac. Copies of contract between Mirvac and Fyna obtained. 25 August 1998 - ATO gives written notice of its intention to conduct an audit of the Fyna Group . It requested that specified financial records of the Group be made available. 4 September 1998 - Meeting of the ATO office rs (Darmanin and Haynes) with James Soong & Wells to clarify the operations of the Fyna Group and to identify the areas of non-compliance with tax legislation. Incorrect information previously supplied by Fyna Group identified by ATO officers. ATO was told that Build-Form employed the formworkers. ATO officers sought extensive information and requested production of employment declarations and group certificates. The question of the incorrect company names and group registration numbers was raised. 16 September 1998 - Meeting of the ATO officers (Darmanin, Haynes and Fordham) with Soong, Wells and the appellant. The appellant told the ATO that the debt for Fyna Formwork for the one year (1996) was just over $1 million and that of Build-Form for the two years (1997 and 1998) was $5½ million. Mr Darmanin said that if it was decided to liquidate Build-Form that may not be the end of the matter. Where there was a large debt the matter had to be referred to the Prosecutions unit of the ATO, which decided on any further action. Personal liability could arise for the directors as the ATO would probably issue Director Penalty Notices which make the directors personally liable for the debt. Mr Soong wished to put forward a proposal. Mr Darmanin said that with the incorrect company name used in 1996, the incorrect spelling of Build-Form used in 1997 and 1998, together "with the numbers juggled in the Paye registration number shown on the group certificates we are concerned that there was a deliberate attempt to conceal your Paye obligations". Mr Soong replied "We have never done anything wrong intentionally". Mr Darmanin further said "The group certificates are incorrect and they are potentially false and misleading statements under the Tax Administration Act. You can be liable for fines up to $5000 for each occasion". Mr Fordham asked the appellant "Why did you say last time that Fyna Formwork did very little work in New South Wales?" The appellant replied "I was under a bit of a strain, it is the first time it has ever happened to me and I said the wrong thing". In answer to a question from Mr Darmanin the appellant said he did not know why most of the employment declarations did not have the employer's part completed and had not been sent to the ATO. 24 September 1998 - A meeting was held attended by Mrs Haynes, Mr Darmanin and representatives of the ATO prosecution unit, the Director of Public Prosecutions and the Australian Federal Police. After the meeting Mr Darmanin advised Mrs Haynes to continue with the audit. 24 September 1998 - Mr Soong on behalf of the Fyna Group submitted an offer to meet current group tax effective from October 1998, a commitment to pay $1,200,000 over the next years three including $150,000 immediately and $100,000 by 31 October 1998 against arrears of group tax. Three year cash flow and management accounts for Fyna Formwork Pty Ltd were enclosed. 1 October 1998 - ATO advises Mr Soong that Build-Form should be a monthly not a quarterly remitter, that the old group registration number had been cancelled and a new one issued. The new number was specified. 2 October 1998 - ATO (Mrs Haynes) arranged meeting for 13 October with Mr Soong and advised that Mr Darmanin wanted to discuss the proposal and needed some more information. She advised that the ATO wanted to have a look at some more records. 7 October 1998 - Letter from ATO to Fyna Formwork listing the records which the ATO requested be made available. 9 October 1998 - Mr Soong advises that it will not be possible to get all the records sought for the meeting of 13 October 1998. 13 October 1998 - ATO (Darmanin, Fordham and Haynes) attended a meeting with Mr Soong and the appellant. Mr Darmanin asked a large number of questions about the financial details of the proposal to pay ATO $1, 200,000 and how the Group proposed to operate. Mr Darmanin stated that the ATO needed an amended proposal factoring in other liabilities (which had been mentioned) before the ATO could give an official response. The ATO officials asked numerous questions about the formwork business and its conduct and examined the records produced by the Fyna Group. 20 October 1998 - ATO officials met with two officers of the Australian Federal Police about referring this case to the AFP for investigation. 28 October 1998 - ATO sent a letter to the appellant confirming that he would make available specified records of the Fyna Group on 6 November 2000 for inspection and that he and Mr Soong would be available to answer questions. 6 November 1998 - ATO (Darmanin, Haynes and Fordham) attended at the Belmore premises of the Fyna Group and examined the records made available. Not all the requested records were available. Mr Soong and the appellant said that they had provided everything they could find. On Mr Darmanin enquiring whether the appellant had reworked the figures in the payment proposal the appellant replied: that he had looked at the proposal but the end numbers were not going to change and he could not see how the offer could be improved. Mr Darmanian responded that he was expecting the Group's situation to be worse. He stressed that unless current liabilities were met the ATO was unable to consider or accept a proposal. The appellant stated that he looked after the staff in the office., 11 November 1998 - Concrete Formwork de-registered. 25 November 1998 - ATO (Mrs Haynes) telephoned the appellant and sought the payroll reports from 1 July 1995. Appellant says he will send them that day. 30 November 1998 - ATO (Mrs Haynes) telephoned the appellant. No reports had been received. Mrs Haynes stated that what she needed was the weekly payroll printouts showing each employee's wages. Most of them were delivered on 3 December 1998. December 1998 - Sundry telephone conversations between Mrs Haynes and the appellant with further records being delivered to the ATO at its request. By this time ATO had many of the records of the Fyna Group. 15 January 1999 - ATO (Mrs Haynes and Fordham) met with Mr J Soong and the appellant. The ATO sought further information as to past financial matters and as to how the Group was currently operating and the current number of employees. Mrs Haynes advised that the ATO was going to reject the payment proposal of the Fyna Group as it could not accept part payment in full settlement of the debt. Later that day the ATO served upon each of Build Form Pty Ltd and Concrete Formwork Pty Ltd by post Creditors' Statutory Demand for payment of Debt and Director Penalty Notices. 19 January 1999 - Federal Agent M Keir executed a Search Warrant on the ATO Small Business Centre and seized all documents and records given to the ATO (per Mrs Haynes) by Mr J Soong and the appellant. 29 January 1999 - Build-Form placed into administration. 5 February 1999 - Meeting of Creditors of Build-Form. Meeting advised company ceased trading on 26 January 1999 and that a new company, Metroform, would handle the labour 18 February 1999 - Letter from Administrator of Build-Form advising of further meeting of creditors, enclosing a report to creditors and a statement detailing the proposed Deed of Company Arrangement with an estimated distribution thereunder of 7.4 cents in the dollar. 22 February 1999 - ATO officials attend AFP Headquarters for briefing regarding the proposed execution of search warrants by AFP. 23 February 1999 - AFP executed search warrants at office premises of Fyna Group at Belmore and seized a large number of documents. Federal Agent Keir arrested the appellant. 26 February 1999 - Majority of creditors vote in favour of liquidation of Build-Form. 94 Mrs Haynes was cross-examined at some length during the committal proceedings. She agreed that the Group kept a complete set of records at its office. The difficulty which arose did not arise from the Group's internal accounting but its reporting. She understood that the appellant was responsible for the administration of the Group. She said that she was asked by Mr Darmanin to investigate the Fyna Group for possible non-compliance with withholding tax legislation. She commenced her investigation with a view to conducting a tax audit. In an investigation she looked for breaches of the tax legislation, She was not so much looking for criminal offences under the Commonwealth Crimes Act. She first met with the prosecution investigation unit on 24 September 1998. She had not been involved in a criminal prosecution prior to the present case but she had had about seven to eight years experience as an auditor. 95 Mrs Haynes denied that from 24 September 1998 the probability of criminal charges being laid was present in her mind. Because of the size of the debt these sorts of cases had to be referred to the prosecution unit. That unit decides what to do about them. She agreed that as at 24 September 1998 the possibility of an arrangement for the payment of the taxation debt was actively under discussion. She agreed that the meeting of 24 September 1998 was with AFP officers at their AFP headquarters. She supposed that that suggested to her that at that stage at least serious consideration was being given to bringing criminal charges against the Fyna Group (or its companies) or its officers. 96 Mrs Haynes conceded, after being shown a diary entry she made that she took a lot of material with her to the meeting at AFP headquarters. She supposed that this was for the purposes of determining whether or not criminal conduct was revealed. She denied that the further information requested at the meeting of 13 October 1998 was intended to assist the ATO in obtaining material to enable the ATO to decide whether or not to prosecute. She did not recall what was discussed at the meeting with the AFP. The only thing she remembered was being told after the meeting to continue on with the audit as normally. She was not aware by 6 November 1998 of any decision being made to prefer charges against Fyna Formwork or any of its officers. The documents received after that meeting were not obtained for the purposes of providing them to the prosecution investigation unit or the AFP. She did not think that they were provided to either of those bodies. The task of the team was to investigate and try to improve compliance in the area of Paye. She said that she could not recall being aware that the AFP was actively pursuing steps towards mounting a prosecution, nor could she recall being aware that a prosecution was contemplated prior to Federal Agent Keir seizing documents from the ATO on 19 January 1999. 97 The appellant submitted to the trial judge and to this Court that the correct conclusion to be drawn from the evidentiary materials was that the statements were made by the appellant and the records requested by the ATO were supplied after at least one of the investigating officials (Darmanin, Haynes and Fordham) had formed the belief that the appellant had committed an offence. This is to be distinguished from the situation where at least one of the investigating officials believed the appellant may have committed an offence. The Crown contended that the evidence fell far short of establishing that any of the investigating officials had formed a belief that there was sufficient evidence to establish the commission of an offence by the appellant. 98 The appellant placed reliance on this statement of Mr Darmanin at the meeting on 4 September 1998 attended by him and Mrs Haynes of the ATO and Messrs Soong and Wells: "The purpose of this interview is to clarify the operations of the Fyna Group and associated companies and to identify the areas of non-compliance with the tax legislation. The information provided by Mr Pearce at the interview on 13 July 1998 is inconsistent with what we know of the Group's operations." That does not amount to an implied assertion by Mr Darmanin that he believed that there was sufficient evidence that the appellant had committed an offence. It was necessary that an investigation be held to establish the correct position. 99 At the meeting of 16 September 1998 the principal speaker for the Fyna Group was Mr J Soong, the managing director. Both Mr Soong and the appellant confirmed the group tax debts of $1 million and $5½ million. Mr Darminan stated that the ATO would probably issue Director Penalty Notices for the Build-Form debt of $5½ million. These are designed to enable the ATO to obtain moneys from the directors. Mr Darmanin's statement that with the incorrect company names and the corrupt group numbers the ATO was concerned that there was a deliberate attempt to conceal the Group's Paye obligations, indicated a matter of considerable gravity, that had to be investigated. The statement does not go so far as to suggest that the ATO believed at that stage that the appellant had committed an offence. Mr Soong replied that they had never done anything wrong intentionally. 100 Mr Darmanin warned that the group certificates were potentially false and misleading statements under the Tax Administration Act. The matter was still being investigated. Over the ensuing months the ATO officers worked their way through the records and documents of the Fyna Group and established what had occurred. Mr Soong explained to them at an early stage that he looked after the projects and the appellant looked after the administration. The ATO mainly spoke with the appellant about the production of the Group's records and documents and the further documents required. Of course, the ATO was aware of the incorrect statements that the appellant had made to them in July 1998 and subsequently. 101As the ATO officers worked through the documents and sought explanations they assembled a considerable body of evidence against the appellant. Ms De Wet's statement was taken on 3 March 1999. Ms Harvey's first statement was made on 1 March 1999 and her second statement was made on 26 March 1999. It seems that Ms Bawalan also made her statement about early March 1999. Up until that time the Crown depended on the documentary materials that had been examined, the appellant's statements and those of Mr Soong and the further materials obtained when the search warrants were executed on 23 February 1999. Ultimately the evidence of Ms Bawalan and Ms Harvey and, to a lesser extent, that of Ms De Wet, were at the forefront of the Crown case. 102 The appellant relied on the ATO officers conferring with the AFP on 24 September 1998 and 2 October 1998, He submitted that in the context of the statements made by the ATO officials up to that date these conferences with the AFP pointed to the ATO officials having the belief that there was sufficient evidence to establish that the appellant committed an offence. That does not follow. It is more probable, or at least equally probable that, given that no arrests were made at either stage, it was accepted that further investigation was required before any decision could be made as to whether there was sufficient evidence to establish that an offence had been committed. The offence being considered was probably one of defrauding the Commonwealth. 103 The evidence amply justified the judge holding that none of the investigating officials had reached the point where they had formed a belief that there was sufficient evidence to establish that the appellant had committed an offence. As the judge pointed out a reference to what might happen is far from forming the belief specified by the section. It is not enough if the investigating official suspects that the person being questioned or requested to produce documents or producing the documents may have or has committed an offence. There has to be the specified belief. 104 The appellant raised a further argument under s.139 of the Evidence Act. This was not dependent on the question of belief. The appellant submitted that while there was no formal invoking of any of the provisions of the Tax legislation requiring the production of documents, notice was given by letter on occasion requiring companies in the Fyna Group and Mr Pearce to produce documents and attend meetings. The letters were firm in their tone, but not mandatory as to the need for the documents to be produced and the appellant and Mr Soong being available to answer questions. The appellant contended that a "carrot and stick" approach was adopted which was tantamount to saying "tell us how much you can pay and make a proper offer, and if you don't there will be a prosecution". The evidence does not support that proposition 105 The ATO officials were persistent and they certainly pushed for all the documents they needed to do a thorough audit. They also sought further explanations where the answers they received to earlier questions appeared to be incorrect or hard to accept. They probably suspected from a relatively early point of time that the appellant had committed an offence or offences. As the amounts of tax involved were large a thorough and demanding audit was to be expected. It was certainly warranted. The appellant and Mr Soong were apprehensive and reluctant participants in the audit. However, as the judge found, and was entitled to find, the interviews were all voluntary and the documents were produced voluntarily. 106 The judge concluded that the materials obtained by way of the production of documents were not obtained improperly. He further concluded that even if these conclusions were wrong he would nevertheless admit the evidence in the exercise of his discretion under s.138(1). This meant that the judge was of the opinion that the desirability of admitting the evidence outweighed the undesirability of admitting that evidence. That exercise of the discretion was open to the judge. The Crown was alleging that three major frauds had been perpetrated upon the Commonwealth involving large amounts of tax. The Fyna Group companies were required to comply with the taxation legislation. If they had done so the audit would have been unnecessary. The appellant was alleged to be deeply involved in the non-compliance. The documents were under his control and the facts were peculiarly within his knowledge. The companies and the appellant were able to avoid detection for so long because of the deceptions practised. It was necessary to have an audit to unravel what had happened. 107 The appellant submitted that the judge erred in not excluding the evidence under s.137 of the Evidence Act 1995. That section reads: "In a criminal proceeding, the court must refuse to admit evidence adduced by the prosecutor if its probative value is outweighed by the danger of unfair prejudice to the defendant." 108 The appellant relied on the circumstances earlier outlined. He submitted that while the materials made it clear that during the audit those representing the Fyna Group were not being fully honest and frank with the auditors there was nothing in the material which bore on any of the three charges. No admission was made and no statement of fact was made capable of supporting, on its own, a conclusion that the appellant directed the falsification of the name of any company in relation to any group tax document or directed the withholding of any document from the Tax office other than in the course of the audit. The appellant further submitted that a great deal of the material sought to be led would be gravely prejudicial. 109 The submission that the evidence under challenge did not bear upon any of the charges is incorrect. The Crown had to prove that the appellant had an intent to defraud. Further, part of the Crown case, especially in relation to the year ended 30 June 1998, was that the appellant must have known what was happening. No tax was being remitted and the ATO was not pursuing the Fyna Group. The ATO's methods of checking had been neutralised. 110 While the admission of the challenged evidence was adverse to the appellant's interests it was not unfairly prejudicial. The judge was entitled to hold that the evidence should not be rejected under s.137. Any other ruling would have been surprising. 111 The challenged evidence was admissible. Appeal Ground 1 is rejected. 112 Appeal Ground 3 was abandoned. Appeal Ground 4 reads: "The trial judge erred in admitting into evidence Exhibit AD over the objection of the appellant.". 113 Exhibit AD comprised two commentaries made by the appellant, one of the meeting with ATO representatives on 16 September 1998 and the other of the meeting with them on 13 October 1998. Normally they are not the sort of documents which the Crown would be expected to be aware of or to tender. A set of each was found in the office of Mr Soong and also in the appellant's office at the Belmore premises of the Fyna Group when the AFP executed the search warrant on 23 February 1999. The AFP seized them. 114 The appellant submitted to the judge that before the appellant's commentaries were admissible they must contain within them some material which was capable of amounting to either a confession or an admission or to an evincing of a consciousness of guilt of the precise matter the subject of the indictment. It was further submitted that if the commentaries were capable of being held to evince a consciousness of guilt in respect of a number of concurrent matters (other offences) and were not confined to the offences charged those commentaries were inadmissible. 115 It was submitted that as these commentaries were capable of supporting an inference of consciousness of guilt as to other revenue offences the commentaries should not be admitted. 116 The appellant further submitted that there was little if any probative value in the commentaries and that their admission would be unfairly prejudicial to him. 117 I have earlier referred to some of the contents of the commentaries. I do not need to enlarge further on such contents. The judge correctly took the view that on their face value the written commentaries were capable of being held to reveal and did reveal a consciousness by the appellant of his guilt in respect of the matters the subject of the counts charged in the indictment. The contrary position is not arguable. The judge concluded, again correctly, that the two written commentaries satisfied the tests in Edwards v The Queen (1993) 178 CLR 193. 118 The judge found that the material in the commentaries was capable of having significant probative value. He held that the probative value was not outweighed by the danger of unfair prejudice to the accused (see s,137 of the Evidence Act 1995). 119 The commentaries provide cogent evidence of the appellant's dishonesty and his intention to defraud. They are adverse to the appellant but not unfairly prejudicial. They throw significant light on what was done and the attempts to conceal what was done from the ATO. They disposed of the notion that there had been some accidental mistake. 120 The two commentaries were correctly admitted. Appeal Ground 4 fails. 121 Appeal Ground 5 reads: The trial judge erred in admitting into evidence exhibit Y over the objection of the appellant. 122 Exhibit Y contains a summary of Paye Remittance Details for Concrete Formwork for the year ending 30 June 1996 and Build Form for the years ending 30 June 1997 and 1998. 123 These details set out the amounts of tax which should have been remitted each month to the ATO and that nothing had been remitted. On 2 November 2000 the Crown tendered the three Schedules containing the details. Mrs Haynes of the ATO, who was giving evidence said that she took the figures in the "Amount Outstanding" column from the payroll reports of the companies which had been provided by the appellant to the ATO. The appellant did not prepare those reports but had seen many of them and carried out spot checks. She had verified from the Department's records that no remittances had been made. 124 Counsel for the appellant objected to the admission of the Schedules. The judge summarily overruled the objection and admitted the Schedules containing the summaries. Copies were distributed to the jury. Counsel for the appellant was not heard in support of his objection. 125 After the morning adjournment counsel for the appellant asked the judge to discharge the jury without verdict on the basis of the erroneous admission of the three Schedules. After hearing argument principally as to the effect of s.50 of the Evidence Act 1995, the judge reversed his earlier ruling and held that the Schedules were inadmissible. That section provides that the Court may direct that a party may adduce evidence of the contents of two or more documents in question in the form of summary if application is made to it by the party before the hearing concerned and it is satisfied that it would not otherwise be possible conveniently to examine the evidence because of the volume and complexity of the documents in question. That section is facultative. It is designed to simplify the issues and the hearing by the use of a summary rather than examining a lot of documents. The Schedules were summaries. It was necessary to consult a large volume of documents and they were complex. Unfortunately, no application had been made before the hearing. 126 After the judge gave his ruling he asked each juror to return his or her copy of the Schedules. This was done and the collected copies (all 12 sets) were marked "P" for identification and placed with the Court file. The jurors had copies of the three Schedules (Exhibit Y) in their possession from about 10.30am to about 3.15pm. The judge explained to the jury that the summaries (or schedules) were not evidence. He directed the jury: "Members of the jury, you should not utilise those documents in any way. If you have looked at them. I don't know whether you have or not and I am not asking - but they should not form part of your thought processes in your deliberations at the moment". 127 The judge explained that the Court would be going to the original documents rather than the summaries. All this took place on Thursday, 2 November 2000. The hearing was adjourned until 6 November 2000 to enable the Crown to assemble the documents in a coherent order. On resumption of the hearing, Mrs Haynes explained that she had gone through each of the 22 binders of payroll reports and made a photocopy of each summary in them as to each week. There were 195 pages of these. They became Exhibit AA. The groups of boxes from which the extracts were taken were marked for identification. After Mrs Haynes had explained the figures in detail it became apparent that the jury had placed before it, although in much greater detail, substantially the same information as had been set out in the Schedules. Mrs Haynes established that the unpaid and unremitted group tax for the year ended 30 June 1996 for Concrete Formwork was of the order of $1,005,920 or $1,007,006.24, depending upon which approach was taken - that difference was immaterial. The unpaid and unremitted group tax for the year ended 30 June 1997 for Build-Form was $2,567,640 and that for the year ended 30 June 1998 was $3,134,885. 128 In my opinion the appellant suffered no prejudice by the admission and withdrawal of the Schedules. In a long trial such as the present one there is no reason to think that the jury did not obey the judge's directions. In any event the material in the Schedules was placed before the jury through the evidence of Mrs Haynes and Exhibit AA which was admitted without objection. 129 The Crown contended that the initial ruling of the judge was correct and that it was permissible to read the words "before the hearing concerned" as meaning the portion of a hearing in which the challenged evidence is sought to be adduced. Alternatively, the word "hearing" included an adjourned hearing. I do not accept that for the purposes of s.50 "before the hearing" necessarily means before the indictment is first presented on arraignment. It is commonplace for an accused to be arraigned upon an indictment presented to ascertain the accused's plea. The trial may take place months later. One interesting question is whether the Court has jurisdiction prior to an indictment being presented. 130 The words "before the hearing concerned" mean before the substantive hearing commences. If a party seeks a direction under s.50, a timely application has to be made so that an accused is not taken by surprise and is not put in the position of having to, in the course of a trial, divert his attention from the conduct of the trial and the major issues it poses and consider whether a summary fairly, accurately and sufficiently summarises an appreciable volume of documents and avoids unnecessary complexity. 131 A party is entitled to know before the substantive hearing commences the fate of any application for a direction under s.50. It may affect the way in which the opposite party conducts his or her civil or criminal case. Applications for a direction under s.50 in the course of a substantive hearing without adequate prior notice should be discouraged. In the present case the decision of the judge refusing to give a direction under s.50 was not erroneous. His initial ruling was given without argument when the effect of s.50 of the Evidence Act 1995 was not appreciated. 132 The initial admission of Exhibit Y (the Schedules) and its withdrawal later on the same day is of no consequence as the material evidence was adduced in another form. There has been no miscarriage of justice. Appeal Ground 5 does not assist the appellant. 133 Appeal Ground 6 reads: The trial judge erred in refusing the appellant's application for a verdict by direction on Count 3 and leaving that count to the consideration of the jury". 134 The appellant submitted that there was no evidence to link the accused with the erroneous group certificates issued by "Bilt Form" (Build-Form) for the year ending 30 June 1998. The only witness whose evidence bore on Count 3 was Ms De Wet who said that she received a direction as to the company name and group number to be inserted on the group certificate from Karen Lee. Ms De Wet did not suggest that she received a direction from the appellant. Counsel adopted and relied on the submissions which he made to the trial judge. These are set out at pages 362-365m 380-381 and 385 of the trial transcript. They could be summarised thus: (a) The Court was dealing with three separate trials of the appellant on three separate charges. Each charge has to be separately identified and considered. The jury could not call in aid its conclusions on Counts 1 and 2 to assist it in determining Count 3. The evidence on each count must be separated and addressed separately. (b) There was no evidence of imperilment of the Crown's interests by the errors in the group certificates. The only evidence on Count 3 was that the group certificates for the year ended 30 June 1998 were at one stage in the appellant's possession. That was not enough to imperil the Crown's interests. The instruction given in 1995 not to send the employment declarations to the ATO could not be carried forward to the year ended 30 June 1998. (c) There was no evidence connecting the appellant with the corrupt alterations in the group certificates in the year ended 30 June 1998. The evidence demonstrated that those involved were Ms K Lee and Ms De Wet. (d) As to the employment declarations Ms Harvey said that she had never received a direction not to send them to the ATO. She just did not send them to the ATO. There was no act of the appellant nor any conduct by him which could entitle the jury to hold him liable on Count 3. The evidence does not support the conclusion that the appellant knowingly acquiesced in the failure to send the employment declarations to the ATO. The alleged failure to act to cause the employment declarations to be sent to the ATO was not an omission of the appellant because there was nothing that tied the direction he gave to Ms Bawalan to any future event. No such tie appears in the evidence of Ms Bawalan and Ms Harvey. There were a number of people between the appellant and the paymistress in the hierarchy, for example, Ms K Lee and Mr Jankovic. (a) While each charge has to be separately considered this does not mean that the evidence led is only relevant to one charge. Parts of the evidence may be relevant to all charges. (b) The criminal act comprised two parts both of which had been proved. Firstly, the interests of the Commonwealth in recovering the statutory debt comprising the group tax had been put at risk and prejudicially affected: Peters v The Queen (1998) 192 CLR 493 at 508, 525 and Spies v The Queen (2000) 74 ALJR 1263 at paras 78-81. Secondly, the appellant had adopted dishonest means to create the situation whereby the Commonwealth's interests were imperilled. Those dishonest means in the present case included deceit. (c) The dishonesty included that the appellant endeavoured to deceive the ATO about the existence of the large payroll of Concrete Formwork and Build-Form. From Ms Bawalan's evidence he knew that there was a requirement to send completed employee declarations to the ATO promptly. He had a long history in the administration of substantial businesses. He was the commercial manager responsible for the administration of the companies in the Group. It was open to the jury to infer that the appellant knew that if the ATO did not receive such declarations it would not know of the numbers of employees of the company concerned. He saw the weekly payroll reports which involved considerable numbers of employees and considerable amounts of money. It could be inferred that he knew that numerous additional employees were joining the respective companies. It could also be inferred that he knew no group tax was being paid. He was aware of companies in the Fyna Group being pursued by the ATO for outstanding group tax going back to 1994. It could also be inferred that the appellant was aware that the ATO was not pursuing the companies for outstanding group tax due as from 1 July 1995 and that the appellant must have known that the reason was because of the continuing concealment of the number of employees from the ATO. (d) When in early July 1998 Mrs Haynes of the ATO raised the issue of group tax the appellant said that most of the work was hire work and that there were only a few employees. A few days before he had reviewed payroll reports which showed the total of unremitted tax instalment deductions to be about $6½ million. That covered the years ending 30 June 1996, 1997 and 1998. Over the 12 months prior to July 1998 he had signed pay cheques to a total value of $10 million. (e) There was a further instance on 13 July 1998 of the appellant concealing the existence of a large payroll when he said that to the best of his knowledge the Fyna Group had no subcontract with Mirvac. The Group was doing work for Mirvac to the amount of $14 million. This was deliberate deceit. (f) The evidence justified the inference that the appellant knowingly caused Build-Form to commit breaches of its statutory obligations. The breach of the statutory obligation to send the employment declarations to the ATO within 28 days was, in the circumstances, dishonest. That breach was repeated many times. (g) The foregoing alone would justify Count 3 being left to the jury. There were, in addition, the group certificates issued with the corrupt name and the corrupt number. The jury were entitled to conclude that the appellant must have been aware of these. He had the group certificates in his possession for a period. He did not send them to the ATO. He had completed his own tax return with a group certificate with the corrupt name and corrupt number. There was also the evidence from Ms Harvey that about a year before July 1998 the appellant stood at her elbow devising the corrupt company name. The jury could infer that the appellant could not have missed the repetition of the corrupt company name on the group certificates for the year ended 30 June 1998. (h) The jury could infer that the appellant as the office administrator of Build-Form allowed it to distribute the employee copy of the group certificates to the employees knowing that they would be used in the tax returns and that this was dishonest because the appellant knew that such documents misrepresented the facts. The issue and use of such completed group certificates hindered the ATO in recovering the group tax and it was intended to do so. At the very least the appellant intended to bring about a state of affairs in which the ATO would be deceived and would fail to know about and pursue the recovery of the group tax. 136 The judge held, correctly, that there was ample evidence on which the appellant could be convicted on the third count. Appeal Ground 6 fails. 137 Appeal Ground 7 purports to reserve the right to add further grounds. Appeal Ground 8 as to sentence will be dealt with later. 138 Appeal Grounds 9, 10 and 11 read: At the hearing the appellant sought to add these grounds: "9. In respect of counts 1 and 3 the verdicts were unreasonable and not supported by the evidence. 10. In respect of counts 1 and 3 the verdicts are unsafe and unsatisfactory. 11. In respect of count 3 there was no evidence to support the conviction." The Court allowed Grounds 9 and 11 to be added but not Ground 10. 139 As to Ground 11 what has been written as to Ground 6 disposes of Ground 11. That ground fails. 140 As to Ground 9 counsel for the appellant conceded that there was evidence to go to the jury on Count 1 and that a significant part of the argument in support of this ground depended on the appellant succeeding in his submissions that evidence had been wrongly admitted. The appellant contended that even if it were held that the evidence was correctly admitted the conviction on Count 1 was unreasonable and could not be supported by the evidence. 141 The Crown case on Count 1 was based on the direction to Ms Bawalan not to send the completed employment declarations to the ATO, the non-revocation of this direction and the inferred knowledge of the appellant that such employment declarations were not being sent to the ATO and the non-payment of the group tax. It was also based on the instruction to Ms Harvey to insert a corrupted company name and a corrupt group number on the group certificate.no evidence that (apart from the temporary direction to Ms Bawalan) the appellant ever gave a direction to anyone not to send the employment declarations to the ATO. 143 The appellant further submitted that there was a reasonable possibility that the false name on the group certificates occurred by error. Ms Harvey had kept a folder in which she kept group certificate reconciliations and on that folder had written "Formwork Concrete". She mistakenly kept payroll journals in the name of a company called Formwork Hire. No such company existed in the Group. She was confused whether the company whose books she kept was called Hochstens or Parkwind. None of this is surprising given the number of companies in the Group and the appellant's use of the corrupt name. The evidence of Ms Bawalan and Ms Harvey on the critical matters was clear. These other matters were not of consequence in the context. To keep the ATO at bay it had to be deceived, and it was. There is no substance in the suggestion that the conviction on Count 1 was not sufficiently supported by the evidence. 144 As to Count 3 I have earlier in this judgment and under Appeal Ground 6 referred to the materials which support Count 3 and the arguments of the appellant. The suggestion that the conviction on Count 3 was unreasonable and not supported by the evidence is without substance. 145 Appeal Ground 9 fails. Count 2 146 In the appellant's written submissions it was contended that the conviction on Count 2 should be quashed and a new trial ordered. There was no ground of appeal to this effect. The absence of such a ground of appeal should be treated as an oversight. The Crown responded to the appellant's arguments on Count 2. 147 The appellant accepted that there was evidence upon which the jury was entitled to convict. He contended that because the jury determined Count 2 in the context of Counts 1 and 3 and of flawed material which the trial judge refused to withdraw, the conviction should be quashed. Reliance was also placed on the judge admitting evidence that the appellant argued was inadmissible and Exhibit Y. I have earlier dealt with that material. The appellant also relied on Ms Harvey's admitted faults and her lack of frankness and truthfulness in her first police statement as to creating and concealing the false group certificates for the 1996 financial year. She admitted writing a note inconsistent with her evidence. It was submitted that her explanation defied belief. Ms Harvey made a second statement in late March 1999 which corrected erroneous portions of her first statement. When she made her first statement she was concerned about her criminal liability. On the critical matters her evidence was clear and cogent. It was supported by other evidence including the surrounding circumstances. The appellant's submissions as to Count 2 fail. Appeal Against Sentence (Appeal Ground 8) 148 The appellant contended that the sentence was too severe. The judge arrived at the sentence thus: Count 1 - sentenced to imprisonment for 2 years from 15 December 2000 to 14 December 2002. Count 2 - sentenced to imprisonment for 3 years cumulative from 15 December 2002 to 14 December 2005. Count 3- sentenced to imprisonment for 3 years cumulative from 15 December 2005 to 14 December 2008. Total - 8 years - Discounted by one-third Total - 5 years 4 months. Non-parole period of 3 years 4 months to date from 10 December 2000 (5 days of pre-trial ustody taken into consideration) and to expire on 9 April 2004. 149 This summary has been taken from the judge's endorsement on the sheet attached to the indictment headed "Continuation of Indictment". The Crown contended that while there was a technical defect in the manner in which the overall sentence was imposed a head sentence of 5 years 4 months with a non-parole period of 3 years 4 months was within the permissible range of sentences, albeit at the lowest extremity, for the total criminality of the three offences. 150 The Crown submitted that it was not clear whether the judge intended to impose three separate cumulative sentences or one sentence for all three offences. It was further submitted that whichever of these alternatives was intended, there was error. The Crown contended: (a) As to the first alternative (3 separate cumulative sentences) despite the three pronouncements "I sentence you" the judge did not sentence the appellant to any of these periods of imprisonment. At p.19 of his remarks on sentence he referred to the sentences he "would have imposed". (b) The judge may have intended to impose head sentences, after applying s.16G of the Crimes Act 1914 (Cth), of 16 months for Count 1 and 2 years for each other count, with all sentences to be cumulative: Total 5 years 4 months. If that had been done, a single non-parole period of 3 years 4 months could have been imposed: s.19AB. (c) If the course in (b) had been followed each penalty for each offence would have been manifestly inadequate. Cumulating a series of inadequate sentences to result in an adequate penalty for the overall criminality does not cure the error of magnitude in each sentence. (d) The judge's intention as to overall penalty could have been achieved by sentences of 5 years 4 months (with 3 years 4 months non-parole) on each of Counts 2 and 3 to be served concurrently. A slightly lower sentence and non-parole period, also concurrent would have conformed to this intention. (e) As to the second alternative, that is the imposition of a single sentence for all three convictions, this is impermissible where the Crown has proceeded by way of indictment: R v Bibaoui (1997) 87 A Criminal R 527 (Vic Ct of Appeal); R v Jackson (1998-1999) 104 A Criminal R 196 at 206. 151 The Crown submitted that while the sentences should be recast there should be no reduction in the effective head sentence or the non-parole period. 152 Having regard to the terms of the judge's signed endorsement this Court should proceed on the basis that the judge sentenced the appellant to three cumulative terms of imprisonment of 2 years, 3 years and 3 years, noted that the total was 8 years and then applied a global discount of one-third to give effect to s,16G. That is not a permissible way of proceeding. It does not lead to an ascertainable sentence for each offence. In the present case as there has been no appeal by the Crown as to the sentences, this Court should not increase the sentences on any of the counts, for example by increasing the sentence on Count 2 from 3 years (prior to the s.16G deductions) to 5 years 4 months. Allowing for the slip in the sentencing mechanics this Court should proceed on the basis that the head sentences imposed on Counts 1, 2 and 3 were respectively 16 months, 2 years and 2 years and that they were cumulative. That is the technical correction required. 153 The appellant submitted that the judge's sentencing discretion miscarried from the outset because the judge's sentences were cumulative. The appellant submitted that the Crown had conducted its case on the basis of a single continuing enterprise extending from about June 1995 to about July 1998. It argued that in such a context it was not open to the judge to impose cumulative sentences. This was especially so where there was no evidence to support Count 3 as a separate and distinct offence. 154 The appellant submitted that a starting point of 8 years as the total sentence was manifestly excessive where the appellant received no benefit from the fraud. He also submitted that the ratio between the non-parole period and the parole period inadequately reflected the special circumstances of the appellant's situation. 155 The judge noted the substantial amount of money involved in the defrauding in each instance, the use of false documents to perpetrate and conceal the frauds, the deceitful nature of the scheme and the difficulty in detecting and investigating the fraud. None of the moneys purportedly deducted by way of taxation inslatments has ever been paid to the ATO. 156 The judge found that the appellant had dissembled, obviated and lied to the taxation audit team, that his dishonesty was serious and that his actions indicated cunning scheming over a considerable period in order to defraud the revenue. While the judge did not regard the offences as being in the worst category, they were very serious. 157 The judge noted the absence of any remorse or contrition at any stage. The judge referred to and accepted these portions of the report of Ms J Carter, the team leader of the Probation and Parole Service at Wollongong: "Throughout discussions with the offender, it was apparent the offender's account of the events somewhat minimised his responsibility. The offender explained that he was acting in the best interests of the company which he stated was in considerable financial difficulty and thus he felt compelled to act in the way he did. The offender appeared reluctant to accept that his actions over a period of some years were deceptive. He described himself on a number of occasions as a victim of circumstances. He further maintains that neither he nor any other member of the company derived any financial benefit from defrauding the taxation department. The offender's employer, a company director reiterated these claims." ... "The offender presented as an articulate and confident individual, who throughout the preparation of this report was co-operative. It is noted however that the offender made no statements of contrition or remorse other than reflecting on the consequences of his arrest." 158 The judge stated that the prisoner's actions were undertaken for the benefit of the Fyna Group and Mr Soong. Both men believed that they also had a responsibility to the men employed by the companies. The situation is an extraordinary one. The companies were unable to make a profit. They never had the money notionally deducted by way of taxation instalments. They needed the "tax money" to keep going and pay the workforce. The Group's quotes for work in a highly competitive field were too low. The Group only had the money needed to pay the nett wages (ex tax) of the workmen and for materials. Mr Soong had the forlorn hope of being able to trade his way out of financial difficulty but the profitable job or jobs never seemed to arrive. 159 The appellant could fairly be described as being in middle management. Neither he nor Mr Soong received any benefit from what was done. Mr Soong was reluctant to shut down the Fyna Group of companies and allow other outside companies to obtain the formwork contracts. Propping up the companies in the manner mentioned by the appellant enabled them to continue to operate for an extended period albeit unprofitably, and to pay no group tax. 160 The appellant has rendered significant service to the surf lifesaving movement. For some years he has been a patrol captain and been active in surf live saving duties. The captain of his surf live saving club spoke in laudatory terms of the high quality of the appellant's service and his strong, honest character. There was evidence from the assistant secretary of the CEFMEU, who had often dealt with the appellant over the Union members' pay and conditions. He described the appellant as a hard negotiator but a man of integrity who honoured any agreement he made and was never dishonest. The director of the Master Builders Association had many dealings with the appellant in industrial matters, and described him as a very straight negotiator. There was no hint of dishonesty. 161 The judge said that he did not take as a mitigating fact that no money was gained by the appellant as a result of his actions and defalcations. The judge said that he agreed with the Crown that the offences were of the same enormity whether or not the appellant gained a financial advantage personally. I am unable to agree with the judge on this point. The offence may be committed whether or not the offender receives a personal benefit. However, if the appellant benefits personally the offence is more serious. There is a difference between stupidity and misguided loyalty or values and actions done to obtain a financial advantage for oneself. I would not regard it as a mitigating fact that no money was received by the appellant or attempted to be received, but that matter should be taken into account in evaluating the overall seriousness of the offence. 162 The appellant's family, especially his children, have been adversely affected. The children have been subjected to cruel taunts by their peers about their father. There has been a great deal of adverse publicity locally. The appellant was born on 15 November 1955. He has had no previous convictions and until this offence had been of good character. Further, he had been active in the service of others. The judge accepted that he and his family had been humiliated. 163 The judge, in fixing a non-parole period followed the usual range for a non-parole period in Commonwealth offences, namely about 60 to 66-2/3 per cent: Claude Bernier (1998) 102 A Criminal R 44 at 49. It was recognised that circumstances which exist in a particular case may make it appropriate to move outside the usual range. 164 The judge thought that the appellant was unlikely to re-offend. However, the judge thought that there was a need for specific and general deterrence and retribution. He stressed the importance of protecting the community. 165 Because of the errors in the sentencing by the judge it is necessary for this Court to re-sentence the appellant. However, it is a case where the Court should pay close attention to the judge's findings and opinions and give them much weight. 166 The offences committed were very serious and considerations of deterrence and retribution are important. The appellant's conduct but it was foolish and misguided. He was not actuated by greed or personal gain. However the frauds were persistent and extended over a long period and a very large amount of group tax was not paid. 167 I do not accept the appellant's argument that cumulative sentences were not permissible. What was required were sentences that adequately reflected the appellant's criminality but took into account the appellant's subjective features and the principle of totality. I agree with the Crown that it would have been better if the judge had imposed longer sentences and made them concurrent. 168 In the absence of a Crown appeal this Court should not increase the effective sentence on each offence. If the Court made the existing effective sentences of 16 months, 2 years and 2 years concurrent that would not adequately reflect the objective criminality of the appellant. 169 Section 19AB of the Crimes Act 1914 (Cth) requires the Court to fix a single non-parole period where there are sentences for a number of federal offences. 170 The fixing of a non-parole period is a matter of considerable difficulty. I bear in mind that this Court has to sentence afresh so that no question of tinkering arises. I have concluded that in all the circumstances of the present case the non-parole period should be 3 years because of the appellant's prior positive good character, his age, re-offending is unlikely, the absence of any gain and the fact that what he did was done out of stupidity and misguided loyalty values. 171 While it is not relevant to the applicant's guilt or his sentencing it is troubling that the ATO did not pick up the frauds at an earlier stage and that the appellant's fraudulent activities were not detected much earlier. By the end of the financial year ending 30 June 1996 group tax of over $1 million had not been remitted. In the ensuing two years about $5.5 million was not remitted. It is to be hoped that the ATO procedures and detection activities have been revised so that such a situation does not occur again. 172 I propose the following orders: (a) Appeals against the convictions on Counts 1, 2 and 3 dismissed. (b) Leave to appeal against sentence granted, appeal allowed, sentences quashed. (c) In lieu of the sentences imposed the appellant is sentenced to: (i) On Count 1 to imprisonment for 16 months commencing on 10 December 2000 and ending on 9 April 2002. (ii) On Count 2 to imprisonment for 2 years commencing on 10 April 2002 and ending on 9 April 2004. (iii) On Count 3 to imprisonment for 2 years commencing on 10 April 2004 and ending on 9 April 2006. (iv) Fix a single non-parole period of 3 years commencing on 10 December 2000 and ending on 9 December 2003. The applicant is eligible for release on parole on 10 December 2003. ******** DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.